A newly appointed CEO, Samantha, identifies as her first major challenge the imperative to break down harmful organising structures and the boundaries between departments in the government agency she now leads.

Samantha observes the agency is organised around several “silos”—it’s a typical bureaucracy. This is evident even at the senior management level. The most important cross-functional team—the senior management team—is not operating as one team. Managers arrive at executive meetings with their functional “hat” on and fail to consider issues from the perspective of the organisation overall. Samantha knows she has a problem with harmful organising structures; she has her work cut out in breaking down these traditional departmental boundaries and the rivalries they breed.

She also notices the level of cooperation between departments is negligible, even non-existent in some cases. Samantha is determined to change this. She reviews the organisational structure, based on the functional model segmented across several distinct functions.

She first decides to form several cross-functional project teams. Samantha includes these new teams in a revised organisational chart. One team is formed to look at improving communication across the agency, for example. Representatives are chosen by the new CEO from all six departments. Another cross-functional project team is set up to review and improve several archaic systems and processes that are not consistent across the agency.

Peter, from the marketing department, is invited by Samantha to be part of one of these project teams. He is quite excited about being chosen, recognising the need to improve cross-functional communication throughout the organisation. Peter goes to talk to the marketing manager in her office. Mary is less than enthusiastic when Peter tells her about this development.

“I wish the CEO had spoken to me first,” Mary said to Peter in response to the news. “I can’t afford to release you to attend these ‘talk fests.’ Peter, you are too valuable to the department. We’re already short-staffed. How often does she want you to attend these meetings?”

“I don’t know,” replied Peter. “She hasn’t told me yet.”

“Well, it sounds like a complete waste of time. Your primary responsibility is to my department, Peter,” said Mary. “You’re a critical person in this department. I’ll have to speak to the CEO about this and let her know my feelings.”

Peter left Mary’s office deflated and confused. He’d thought this was a great opportunity to break down the silos in the agency and improve communication across the organisation. He couldn’t understand his boss’s reaction.

The problem with job-based organising structures

Structuring business around specialised clusters or functions has occurred since the birth of the bureaucracy. Most companies still operate this way; and those that  have tried shifting to alternative structures, such as the matrix or product models, have seen mixed success. It raises the question: Is the limited success of these other organising structures due to the models themselves, or the people who lead and work in them?

The matrix model: An alternative to the function-based organising structure

In the matrix model employees endeavour to keep two lines of accountability open; with their hierarchical boss and their project manager. The purpose of the matrix model is to have the best of both worlds: functional control and project flexibility. Several experts argue that it’s not the matrix design that’s faulty; it’s the people who lead them. I agree. The key to making the matrix model work—or any structural arrangement, for that matter—is two-fold: possessing and using interpersonal skills and developing an entirely different attitude about how helpful the functional-based working arrangement actually is.

Appropriate communication skills are needed to make the matrix model work—or indeed any other non-functional model. It all boils down to being a leader instead of behaving like a manager. It means exercising influence to get one’s way rather than using the designated authority of the managerial position in the organisational hierarchy. This is especially the case in a matrix model; the project manager doesn’t have a formally titled functional position in the organisational framework. Good project managers—leading in a predominantly functional workplace—rely on their influencing capabilities before their technical prowess.

The future of working structures

Even when managers do possess the required leadership skills, , it seems counterintuitive for employees working in a fast-paced, flexible, and agile working environment to receive most of their information from one,or even two, bosses. The single vertical line of communication is the backbone of the functional-based organising structure. Despite deliberate efforts to move away from this archaic work arrangement, it’s still more challenging to escape this hierarchical power trap than it ought to be. Even firms adopting a matrix design to enable increasingly project-oriented work environments, have trouble letting go of the old hierarchy. And leaders seem powerless to prevent the vertical chain-of-command dominating decision-making over cross-functional project work. Even with the best of intentions—and with alternative organising structures—functional thinking rules.

Changing this military mindset is the key. It is time to remove functional-based organising structures.

This article is an extract from Dr Tim Baker’s book, Performance Management for Agile organisations: Overthrowing the Eight Management Myths that Hold Businesses Back